BOOST FOUNDER'S NEXT VENTURE A NEW KIND OF MVNO COMPANY

Boost Mobile founder Peter Adderton signaled his return to the U.S. mobile virtual network operator market he helped establish, announcing at the recent Cellular Telecommunications & Internet Association's Wireless 2005 event in New Orleans this month the launch of his newest initiative, Amp'd Mobile.

The first MVNO to operate over Verizon Wireless' high-speed EV-DO network, Amp'd will target the same youth market Adderton staked out at Boost, this time via next-generation mobile entertainment. The company will not only license BREW-based multimedia content but also develop its own original video and music offerings. It even plans to offer real-time live event broadcasting.

“We wanted to create a brand about 3G, targeting the next generation of youth,” said Adderton, who will serve as CEO of Amp'd. “We're thinking more like a media company than a wireless company.”

Amp'd will further differentiate its service by enabling subscribers to build their own handsets on its Web site, making available a number of different designs, colors and accessories. Vendor partner Kyocera will offer a low-end, entry-level 3G handset, and Motorola will reportedly deliver its own handset by the time Amp'd launches later this year. Users also will be able to choose between prepaid or postpaid billing models.

“[Amp'd is] looking for great differentiation in terms of what kind of service it is and how they market and sell it,” said Andrew Cole, vice president and wireless practice leader with management consulting firm A.T. Kearney. “There's still growth opportunity in the youth segment, and optimized with Verizon's EV-DO network, it's going to be quite interesting to see what [Adderton] does.”

The launch of Amp'd not only signifies the return of Adderton but also represents Verizon's first foray into an MVNO market it had previously avoided.

“In a high-capex industry, you have to think about return on investment, and it's very financially astute to manage a network with a wholesale element,” Cole said. “Every single carrier is strong in certain segments and weak in others. That's universal — it doesn't matter which carrier you're talking about. But it's taken some carriers a lot of time to come to terms with and to agree with.”

Adderton first earned the attention of the wireless sector with Boost, which launched on Nextel's national network in the fall of 2002, just months after rival MVNO Virgin Mobile. Courting the youth demographic by advertising its prepaid service in skateboarder and surfer magazines, the company's edgy profile contrasted sharply with Nextel's enterprise-focused strategy, but in May 2003, the carrier nevertheless bought 66% of Boost for an undisclosed amount. Adderton chafed under the corporate yoke, resigning six months later via a prepared statement that cited strategic differences as well as Nextel's failure to “live up to promises” made when it acquired the company.